Slippage At Pepperstone Reviewed

For the past six months I have been in looking for a great forex broker for to utilize my scalping EA with. Not surprisingly not all forex brokers are identical, for this reason I had to open a forex accounts with many of different forex brokers. Opening accounts and conducting in-depth testing is quite an arduous task so to save you the time and inconvenience of doing this on your own I made a decision to write this report detailing my results.

In order to execute this test obviously I had to compile a shortlist of fx brokers to open trading accounts with. This was quite an easy task for me as it was simply a matter of selecting forex brokers with the lowest spreads from Myfxbook. My broker shortlist was made up of Fx Open, Pepperstone, Armada Markets and IC Markets. These forex brokers were chosen simply because they have some of the lowest EUR/USD spreads in the world. IC Markets had the lowest spreads of the lot with an average spread of 0.1 pips for EUR/USD, on the other hand Pepperstone had the largest spread which averaged 0.3 pips.

Spreads however aren't the only important aspect that should be tested when deciding on a suitable forex broker for EA trading, other important aspects include deal execution speed and slippage.

I commenced my testing by opening real accounts with an opening balance of $1000 with all 4 forex providers. All forex brokers had a relatively smooth account opening process with IC Markets being the easiest forex broker of the lot to open an account with. With $1000 in every single one of my 4 forex broker accounts I was able to give all 4 fx brokers a workout.

It was very clear that IC Markets spreads were the best out of the 4 forex brokers trialed so it was now time to check slippage across all of the forex brokers. Slippage isn't the easiest parameter to check as it is highly dependent on forex market liquidity that's closely connected to market conditions. One Significant thing to note here is that often ECN forex brokers have a little more slippage than your conventional market maker brokers. To check slippage across all 4 forex brokers I made a decision to utilize a robot that I'd have running on a VPS setup with all 4 of my live fx broker accounts. The expert advisor that I used for this test was Super Scalper or SS, this expert advisor adopts an aggressive fx trading strategy which enters positions on price breakouts which makes it the perfect expert advisor to utilize when testing slippage across broker accounts.

After 9 weeks of testing across all broker accounts in a variety of different market conditions I had enough data to be able to produce conclusive results which were extraordinary to say the least. Across all broker accounts the outcomes were incredibly different, the worst slippage occurred with fx broker Armada Markets where the slippage averaged six pips, not a great outcome, the second worst was Pepperstone where slippage was only slightly better averaging 5.5 pips. FX Open and IC Markets were the only 2 forex brokers to score well on this assessment, FX Open had slippage of approximately three pips whereas the most slippage that I got at IC Markets was 0.5. This easy experiment proves that the spreads offered by some forex brokers like FX Open are not always that good when you factor in slippage. In the case of IC Markets the tight spreads are accompanied by negligible slippage, ICMarkets really do come out trumps in the slippage test.

Testing latency was next on the agenda. It was extraordinary to note that just 2 of the 4 forex brokers trialed had servers in the Equinix NY4 data centre in New York. Of course having servers in Equinix NY4 mean dealing will naturally be must faster, the main reason for this is because most bank servers are also in NY4. Faster execution speeds means less slippage and superior performance for automated EA traders. My speed trials revealed interesting results, it was surprising to note that one of the forex brokers Pepperstone have poor performance overall in spite of having their servers in NY4. Latency varied quite a bit, Armada markets had the worst results with average latency being 710 m/s, Pepperstone followed with 540 m/s, FX Open had an average of 430 m/s latency and IC Markets topped the lot with a staggering 145 m/s latency. IC Markets has by far the very best performance when it comes to trade execution latency.

So to conclude my brief evaluation, all 4 forex brokers are fine, but if you won't accept a broker that is fine and need an edge in your fx trading in relation to spreads, slippage and trade speed one broker comes out on top. This broker is rated as world class in my books and not just fine, that broker is IC Markets. Naturally you should do some of your own testing also but for me IC Markets is really the only word class broker out of the 4 forex brokers that I selected to review.